The Teachers’ Retirement System of Louisiana has committed up to $50 million to Patria Investimentos’ Brazilian Private Equity Fund V, according to documents from the system’s investment consultant Hamilton Lane.
Fund V is targeting $1.5 billion. Louisiana Teacher’s commitment will not exceed 10 percent of the total fund, according to the documents.
Patria’s strengths include its capital deployment pace and “attractive performance in a healthy unrealised portfolio” according to the documents.
The Park Hill Group is acting as placement agent for Fund V, according to media reports.
Patria’s prior vehicle is “relatively immature with little capital deployed and a significant drag fee” according to the documents. Fund IV, a 2011 vintage, closed on $1.2 billion and had a net internal rate of return of 8.3 percent as of 31 December 2013.
Patria Fund III, which raised $617 million in 2007 and is still being invested, was generating a net IRR of 19.4 percent. Fund II closed on $393 million in 2005 was generating a net IRR of 106.5 percent.
Patria makes mid-market buyouts of between $75 million and $200 million. Target sectors include healthcare, education and consumer as well as “untapped” opportunities in sectors such as agribusiness, according to the documents. Patria seeks at least one board seat at each portfolio company, including the chairman seat. About 75 percent or more of the investments are in Brazil, with the remaining 25 percent in the rest of Latin America.
Portfolio companies include construction company Zipco and diagnostic medicine company Alliar.
Patria has completed 26 platform acquisitions and 94 add-on acquisitions since inception. Fund V will make between eight and 10 investments. The firm has more than $6.5 billion in assets under management across its private equity, infrastructure, real assets, capital management and merger and acquisition advisory businesses.
Patria was founded in 1997 and is led by senior partners Alexandre Saigh, Ricardo Scavazza, Daniel Sorrentino and Marco D’Ippololito. In 2010, The Blackstone Group bought a 40 percent stake in the firm for an undisclosed sum.
Patria has offices in London, New York, Rio de Janeiro and São Paulo and plans to expand to Colombia and Chile.
Louisiana Teachers is on track to commit between $900 million and $1.1 billion to private equity during the fiscal year ending 30 June 2014, Private Equity International previously reported. In January, Louisiana Teachers committed $50 million to Stone Point Capital’s Trident Fund VI, a new relationship for the pension.